David Rockefeller Sr. sure knows how to pick a winner.

In 1960 the banker and art collector bought a painting called "White Center (Yellow, Pink and Lavender on Rose)" by abstract expressionist Mark Rothko. The price: around $10,000. Fast forward to May 2007, when the work was sold after a bidding war at Sotheby's -- and an anonymous buyer paid an eye-popping $72.8 million for the brightly colored work. Bidding war at Christie's

This fabulous return on investment suggests that buying the right art at the right moment can significantly enhance your net worth. It might -- but don't rush to cash out your 401(k) for some canvas stretched on a wooden frame.

Kevin Radell, senior financial strategist at artnet, a Web site that tracks the fine-art market for collectors and investors, says the art market can be a good -- if sometimes highly risky -- investment as an alternative asset category. But, he adds, "you have to understand the nature of the market." Can art make you rich?

While the windfall from the sale of Rockefeller's Rothko was impressive -- the previous auction record for a Rothko was a mere $22 million -- the sobering reality is that most artworks don't appreciate at that clip. And prices can swing wildly, even for blue-chip artists, making market timing difficult.

Take Andy Warhol, famous for his Brillo soap boxes and iconic pictures of Chairman Mao and Marilyn Monroe. Sale prices for the artist's top pieces soared from $418,000 in 1991 to $17 million in 2006, according to artnet, which has information on more than 4,300 major artists. So, was 2006 the year to sell your Warhol? Maybe not. The collector who waited until 2007 to sell a 1963 Warhol called ''Green Car Crash (Green Burning Car I)'' cashed in on an even grander scale: The picture fetched $71.7 million at auction.

Overall, the art market has been bullish over the past few years, fueled by superrich collectors and a steady supply of top-quality pieces by superstar artists. According to the Mei Moses Art Index, which tracks repeat auction sales of specific works, prices rose 18% in 2006. And one particularly strong category -- postwar contemporary art -- soared 45%.

But the same index suggests that gains tend to even out over longer time frames: Between 1956 and 2006, asset appreciation in the art market was roughly equal that of the S&P 500. Chart: Should you buy stocks . . . or art?

"Art tends to have returns similar to equities and outperforms bonds, but it is riskier," says Michael Moses, co-creator of the index and co-founder of ArtAsAnAsset.com, which reports on the art market's financial results.

One special problem with an art investment is that it is fairly illiquid: If the art market is tanking, you can't unload an artwork by simply calling a broker and making a trade. Art is a tangible asset, more like real estate.

And good luck finding a buyer if your artist has lost favor with critics, collectors and art-world insiders. The tastemakers and gatekeepers of the art world continually crown new art stars -- and catapult others into oblivion. After all, "fashion and tastes, what is cool and what isn't, change," says artnet's Radell. Chart: Hot or Not?

Consider this: For a time, Impressionists were all the rage, especially among Japanese buyers. They drove prices through the ceiling . . . for a while. Then, in the '80s, bold expressionist painters had their day.

Now, photography and postwar German artists are hot -- and so is Andy Warhol, although it's unclear exactly why.

To hedge your bets, Moses suggests including several artists in your portfolio.

"Choosing art as an investment is like picking an Internet startup or biotech stock," he says. "One or two will make it and many more will fall by the wayside, so diversifying is the way to lower the risk."

Before buying, set a budget and a time horizon. To get a feel for the market, do some research, checking indexes that track sales and auction prices for specific artists. (Bear in mind that auction results reflect only a fraction of all art sales -- most of which take place behind closed doors in private deals -- but auction information will at least give you an indication of market sentiment.)

Of course, you will enjoy looking at your picture more than, say, a share of Google. But remember that owning a painting or sculpture involves additional costs, including a buyer's premium to the auction house (normally between 12% and 20%, although it can be more), as well as insurance and possibly conservation expenses to keep the work in pristine condition.

Another factor: emotional attachment. Once a piece has taken on special significance for you and your family, you might not want to part with it -- even if it has soared in value.

That's why most collectors insist they don't buy art as an investment, because art is about beauty. But Ira Weinstein -- a collector in New York's Westchester County who has about 200 works acquired over the past 40 years -- is more practical. "When you start plunking down big numbers for art, you have to think of it sometimes as an investment," he allows.

Over the years, Weinstein has sold some works at peak market prices to raise capital to buy work he has admired -- or to invest in a new artist for his collection. A decision to sell is based on answers to two fundamental questions: Does he still like the work? And what is it worth on the market? "If I don't like it that much and the value is up, then the two come together," Weinstein says.

Still, he says there are some works he would never sell. "Pricewise, there are mistakes hanging on the wall," Weinstein admits. "But I wouldn't sell them because I love the work. They have special meaning."

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Published Jan. 18, 2008